Academic journal article Journal of Agricultural and Applied Economics

Consumer Likelihood to Purchase Chickens with Novel Production Attributes

Academic journal article Journal of Agricultural and Applied Economics

Consumer Likelihood to Purchase Chickens with Novel Production Attributes

Article excerpt

Typical supermarket chickens are produced with novel or controversial attributes. This continues despite contrasting growth in consumer interest in organic and natural foods. This study surveyed Delaware consumers' likelihood to purchase chicken given different attributes: free range, given antibiotics, irradiated, fed genetically modified (GM) feed, GM chicken, and price. Examining conjoint analysis data with a heteroskedastic two-limit tobit model, GM chicken and other novel attributes were found to lower purchase likelihood significantly. Understanding these results should help the industry meet consumer preferences while aiding its continued expansion to benefit workers and growers across the South.

Key Words: antibiotics, chicken, conjoint analysis, genetically modified, heteroskedastic, irradiated, tobit

JEL Classifications: Q13, D12, C24

Chicken attributes have changed as new technologies have been applied to production. For example, today a large percentage of the corn and soybeans grown in the United States and used for chicken feed are genetically modified (GM) varieties. Additionally, the use of irradiation on chicken products to help prevent foodborne illnesses has been granted increasing approval over the last 15 years. Yet these technologies are ones that consumers continue to have little awareness or understanding of. The possibility of a GM chicken, while currently hypothetical, could further confuse or alarm consumers. Other existing attributes, such as antibiotic use, although perhaps more familiar to consumers, may be viewed negatively or with uncertainty.

These issues and concerns, which are not unique to the chicken industry, have led to an increase in consumers' awareness and concern for what is involved in the production of their food and what consequences their families may face in terms of food safety. The food industry has responded over the past decade with the development of organic and natural versions of many products. These markets began as small niches, but have grown substantially over recent years with expanding offerings in most supermarket chains and at giant retailer Wal-Mart. Organic foods alone have seen sales increases commonly cited as 20% per year, with a strengthening since the certification program of the U.S. Department of Agriculture (USDA) (Dimitri and Greene).

The concern motivating this research was how the introduction of novel attributes into the production of chicken may affect consumer purchase intentions, particularly in light of consumer movement toward organic and natural offerings. The response will be important if the industry is to continue to increase consumption as it has since the 1940s. This steady rise in popularity led chicken to surpass pork in 1993 to become the second most consumed meat in the United States (after beef) at 26.85 kg (59.2 lbs.) per capita per year in 2004 (Buzby and Farah). Part of this growth in chicken consumption came when consumer preferences toward beef changed due to health concerns regarding consumption of red meat. During the 1980s in particular, there was increased promotion of chicken as a healthier alternative. The question would be if the new technologies that are or could be used in the production of chicken may change consumer health or safety perceptions and impact consumer likelihood to purchase chicken.

The current structure of the chicken industry and the firms within it is of high concentration and almost complete vertical integration. Production is concentrated with the primary firms, referred to as integrators, operating in the South, with Georgia and Arkansas the top two producing states. Most of the integrators use similar methods of production. These include the common use of GM feeds and, at least in the past, the use of antibiotics for both therapeutic and subtherapeutic reasons. Changes in consumer purchase patterns could have a dramatic effect, especially if the industry were slow to recognize and adjust to consumer changes. …

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